Lenders in the dock: past bank scandals

HSBC faces a final bill of $1.5bn (£937m) for the “shameful and embarrassing”
US money-laundering scandal that has engulfed the lender. Here are a few
other banks that have been fined because they violated US sanctions.

HSBC was forced to issue a public apology in July over its role in facilitating a multi-billion-dollar money-laundering operation for drug gangs and terrorists worldwide.Photo: ALAMY

Carl Levin, chairman of the Senate Permanent Subcommittee on Investigations, described the bank as being "pervasively polluted for a long time," as an investigation by US authorities found that HSBC accepted more than $15bn in cash between 2006 and 2009, much of it thought to be connected to Mexcian and Russian drug gangs and terrorists.

The Senate committee said HSBC had failed to properly monitor these transactions.

The bank also insisted that "99.9pc of the transactions" complied with regulations.

Credit Suisse

In 2010, Credit Suisse agreed to a $536m settlement over "egregious violations" that saw the bank process almost 5,000 transactions from August 2003 to November 2006 to the benefit of Iran.

In the US Treasury Department's settlement agreement, the Office of Foreign Assets Control (OFAC) said that during the 1990s, Credit Suisse in Zurich had starting to add internal warnings to the accounts of its Iranian bank clients. It told Credit Suisse employees:

"Do not mention the name of the Iranian bank in payment orders." Such warnings ensured that payment orders given by the Iranian banks would not be processed automatically, but rather would be manually reviewed and effected by Credit Suisse employees. Between 2000 and 2004, the Iran Desk of Credit Suisse provided similar instructions to its Iranian bank clients via a standard letter, which stated in part: "The most important issue is that you and/or your correspondents do not mention your good bank's name in field 52."

The OFAC added that Credit Suisse had engaged in a "systemic pattern of conduct giving rise to apparent violations of OFAC sanctions involving Iran, Sudan, Libya, Burma, Cuba and the former Liberian Regime of Charles Taylor".

ING

In June, Dutch bank ING agreed to pay a record fine of $619m (£397m) to settle charges that violated US sanctions by secretly moving billions of dollars through the US financial system on behalf of Cuban and Iranian customers.

The US Department of Justice accused INGof helping to "provide state sponsors of terror and other sanctioned entities with access to the U.S. financial system, allowing them to move billions of dollars through US banks for illicit purchases and other activities".

It said ING had intentionally manipulated financial and trade transactions to remove references to Iran, Cuba and other sanctioned countries and entities "on more than 20,000 occasions".

According to court documents, beginning as early as 1995 and continuing until January 2007, Lloyds, in both the United Kingdom and Dubai, falsified outgoing US wire transfers that involved countries or persons on U.S. sanctions lists. Specifically, according to court documents, Lloyds deliberately removed material information—such as customer names, bank names and addresses—from payment messages so that the wire transfers would pass undetected through filters at U.S. financial institutions. This process of "repairing" or "stripping," as Lloyds commonly referred to it, allowed more than $350 million in transactions to be processed by U.S. correspondent banks used by Lloyds that might have otherwise been blocked or rejected due to sanctions regulations or for internal bank policy reasons. According to court documents, the criminal conduct by Lloyds was designed to evade, and to assist its customers in evading, U.S. economic sanctions imposed against Iran, Sudan and other countries.